Welcome

Business
Implications
of
Industrial
Relations

Indl. Relations in the Past

Phase I
Managements policy towards labor :
Autocratic, Authoritarian
Dispute settlement not amicable
No trace of Collective Bargaining
Recourse to unconstitutional means
Visit courts for seeking justice
Multiple litigations Disputes not
expeditiously resourced
Agitational approach of workmen
through lockouts

Mgmt. Actions & Status

Phase I
Retrenchment of labour force
Pending labour matters
Tribunes, High Courts &
Supreme Court
Continued industrial unrest
Unions No recognition/role

Indl. Relations in the Past

Phase II
Companies negotiated Labour matters with
union
Major settlement Signing an Agreement
40% to 42% wage rise
Collective bargaining new method of
resolving disputes
Old method of unilateral decisions
discarded
Committees formed to resolve matters
through mutual negotiation
Environment of Adjustment &
Accommodation

Indl. Relations in Past Phase

II (contd.)
However :
Union Management relations cordial
But no increase in productivity
Increasing interference of local union
representatives on shop floor
Strong methods Demoralized
supervisory staff
Restricted flexibility Mass
employment for coping with
increased production

Indl. Relations in Past Phase

III (contd.)
Mgmts. recognition of new union
Mutual negotiations but at heavy cost
Settlements led to increase in wage
cost beyond expectation
Pragmatic approach of Mgmt
Paying initial wage led to increased
production
1980s
Marked by industrial peace
(productive peace)

Indl. Relations in Past Phase

III (contd.)
Signing of settlements
Introduction of new methods
Group working, Flexibility
Resistance to accept Highly
controversial
Mass violence amongst laborers
caused injuries & hospitalization

Achievements on IR Front
Phase IV
Marked increase in productivity
Restoration of discipline
Constructive involvement of
workmen into certain Mgmt. issues
Reduction of manpower by way of
natural separations & voluntary
separation schemes
Sustained productive peace all over

Summary Phase IV
Litigations continue
Productivity stagnant
Manpower increase
disproportionate to returns
Violent inter union rivalry
predominant
Lack of universally accepted
leadership at unit level

IR Strategy
Expression of enterprises capacity to
develop sound IR mgmt. plan
IR Strategy involves :
Development of Policy statement
Define responsibilities
Identify resources for implementation
Minimize impacts
Identify sub-contractors capacity to
comply with IR responsibilities
Supportive Review measures
Initiate corrective action

IR Strategy Key Elements

Commitment & Mgmt.
responsibility
Planning
Identification of legal
obligations relating to IR
IR risk identification & Mgmt.
Planning

Steps Risk Management

Assessment
Issues related to enterprise & IR
envt.
Risk analysis
Risk resource planning
Action plan & Mgmt. measures
Contingency planning Minimize
adverse impacts
Subcontractors Compliance with IR
& employment obligations

Measurement, Evaluation &

Review
Procedures
for
Records:
Identification
Filing
Retrieval
Retention

IR

Mgmt.

Internal Review
Establish internal Mgmt. system
Ensure
effective
implementation of IR Strategy
& Project IR Plan
Aims in continual improvement

IR Functions
About how people are treated
Enterprises decision long-term
view
Achievement of goals

IR Functions

(contd.)

Pluralistic in outlook
Covers relations b/w :
Employer & employee (the indiv.
relations)
Employers & unions
Employers, Employees & State
(collective relations)

IR Focus
Collective aspect of relations
labor law, collective bargaining
Individual grievance handling,
dispute settlement
Not in team-building conflicting
with union loyalty
Rules governing employment
relationship prescribed by State laws
Balancing/minimizing conflicting
interests

Basic Objectives of IR
Efficient production of goods &
services
Determine terms of employment,
in interests of employer,
employees & society
Establishment of mechanisms for
communication, consultation &
cooperation

Basic Objectives of IR
Avoidance & settlement of
disputes where possible through
negotiation
Provide social protection where
needed
Establish harmonious relations
b/w employers, employees,
organization & State

Collective Bargaining
Every workers right regardless
of his status in society
Arrives at a consensus affecting
2 social partners
even if not resulting in
formalized agreements
Account demands for
individualization implied by HRM

Determinants for Strategic

Approaches
Of Trade Unions New Scenario
HRMs focus Enhance enterprise
competitiveness
Enterprises will depend on peoples
skill & productivity
Unions involvement in consultation
mechanisms for new HRM initiatives
Unions focus
enterprise level problem & issues

Determinants for Strategic

Approaches
Unions to be (contd.)
exposed to Trg. Prgs. in
HRM issues
Unions need Long-term perspective
for Change Mgmt.
E.g. German unions & works councils
have a structure of incentives,
including employment security,
effective representation, &
participation, continuing retraining in
broad skills, which gives them a longterm perspective in plant bargaining

Determinants for Strategic

Approaches
(contd.) depends on mgmt.
Union cooperation
attitudes
Management strategy
Open to union not avoidance
Unions to recognize :
Redesigning of Collective bargaining
Lesser quantum of pay increases
than in past
Involvement in flexible & skill-based
elements of pay

Determinants for Strategic

Approaches
(contd.)
IR means of maintaining
industrial peace
IR avoids & settle conflicts, disputes
Unions to be active in area of conflict
avoidance, not only resolution
E.g.
HRM practiced in unionized workplaces,
rather than in non-unionized ones
Japanese practices -Blend of collectivist
IR & HRM through Joint Consultation
System

Determinants for Strategic

Approaches
(contd.)
IR future Relevance
more at macro
level issues
Enterprise level/plant level bargaining
Formulating overall IR policy
Delimiting boundaries of action for two
other parties
Providing a measure of social
protection through labour law &
judicial bodies
Providing necessary framework for two
parties to function

Determinants for Strategic

Approaches
IR to open (contd.)
its doors to other
disciplines
industrial sociology, OB &
psychology not only by
economics & law
Future of IR may depend on
capacity to develop more
collaborative relations, move away
from adversarial ones

Trade Unions' Role

Importance
The free trade union movement
democratically elected by workers
& accountable to their membership
Unions are critical
power to deny the human resource
necessary for generation of profits
Unions capacity to strike is ultimate
threat to investor class

Trade Unions' Role

Importance (contd.)
Pay attention to areas
divides trade unions & their
allies
Competitive markets maximize
use of resources for consumption
Democratic regulation
capital & devpt. of long-term
planning

Trade Unions' Role

Importance (contd.)
Design a "grand bargain"
Distinction b/w rights & standards
Wages & benefits depends on what
enterprise can pay
Level of minimum wage depends on
economic dev. level of country
Reach an agreement
Enforceable labor rights in
exchange for commitments of longterm devpt.

Roots of Management
Thinking
Many of most successful & widely
used strategy tools today :
framework
cost curves
structure
conduct
Performance (SCP) model
Concept of sustainable
competitive advantage

Bringing Discipline to
Strategy
Strategy is handful of decisions
that :
Drive/shape most of companys
subsequent actions
Are not easily changed once
made
Have greatest impact on
whether companys strategic
objectives are met

Handful Decisions
Selecting companys strategic
posture
Identifying source(s) of
competitive advantage
Developing business concept
Constructing tailored value
delivery systems

Two Concepts of the

Corporation
SBU

Core Competence

Basis for
competition

Competitiveness
of todays
products

Inter-firm
competition to
build
competencies

Corporate
structure

Portfolio of
business related
in product
market terms

Portfolio of
competencies
core products &
businesses

Resource
allocation

Discrete
businesses are
the unit of
analysis; capital
is allocated
business by
business

Businesses &
competencies are
the unit of
analysis: top
mgmt. allocates
capital & talent

Industrial Relations
Relations b/w. mgmt. & union or b/w
representatives of employees & representatives of
employers
My boat attitude
: Get out if you do not
like
Shared boat attitude : We sail together. Do
not rock it
Our boat attitude
: Our own common
enterprise. Let us join in
our
efforts to better it

Thank You